Week in Review: New life in Montana, rule tweaks in Oregon & obstacles in New England

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By Bart Schaneman and Omar Sacirbey 

Montana’s medical marijuana industry is reactivated, Oregon adjusts its testing regulations, and New England’s adult-use industry encounters obstacles.

Here’s a closer look at some notable developments in the marijuana industry over the past week.

Back from the dead

Medical marijuana dispensaries in Montana will be flipping their closed signs to open after a state judge gave the industry a new lease on life.

“We’re elated,” said Bob Devine, who owns a dispensary in Bozeman and is president of the Montana Cannabis Industry Association. “We can get the program up and going.”

A district judge lifted a three-patient limit that was passed in 2011 and implemented in August 2016. That limit, approved by state lawmakers, effectively shut down the MMJ industry.

Last month, Montana voters approved a ballot initiative to set up commercial cultivation operations and dispensaries.

A drafting error in the measure had postponed its implementation until next summer. But the judge ruled the error shouldn’t prevent ill patients from getting medical cannabis immediately, meaning dispensaries can reopen.

Devine expects patient counts in the state to rebound and possibly top pre-August numbers, which would help hasten the industry’s revival.

As of early this year, Montana had 50-60 dispensaries and 13,200 registered MMJ patients, according to the Marijuana Business Factbook 2016.

Following the three-patient limit, Devine said, the patient count plunged to around 800 because people had trouble finding an MMJ provider or growing their own. People who didn’t elect a provider or grow their own were dropped from the patient list.

“With the program being legitimized again, you’ll probably see a lot more patients reregister,” Devine said.

The next step is to get through a legislative session and work out the regulatory details of the new program.

Devine said he’s already taking the needed steps to reopen his own dispensary.

“We’re raring to go,” he said. “A lot of us have stuck this out the whole time.”

Change, but not relief

Nice try, but try again.

That’s one way to sum up how Oregon marijuana retailers feel about changes made to onerous testing rules that have created a supply squeeze in the state and a drop in sales.

The new rules, announced Dec. 2, lower testing costs and allow marijuana businesses to submit larger and more varied sample sizes for testing at one time.

However, the Oregon Health Authority’s regulations don’t address issues related to analyzing pesticides, such as chemical levels, which played a significant role in the failed tests that led to the supply shortage.

Some in the industry worry that scores of companies still could go out of business if the state doesn’t loosen the rules further.

“The initial changes that they made, they address many things on many levels. With regards to the market being seized up and goods not flowing, I think little has been done to change that,” said Beau Whitney, an economist who heads the canna-centric consulting firm Whitney Economics.

The good news for Oregon’s cannabis business owners, Whitney said, is that the state government started reworking the regulations long before his recent report examining the test-related marijuana supply shortage.

“The governor’s team has stepped up and started trying to moderate this issue,” Whitney said. “It’s a very complex issue to balance public safety and the growth of a regulated industry.”

Because the state government has been proactive about altering the regulations, Whitney believes Oregon MJ entrepreneurs soon will “see another set of policy changes coming out.”

While industry professionals should fight for more reasonable regulations, Whitney said, they should be careful not to leave the impression they don’t want any cannabis standards.

“There’s been testing since before Oct. 1. Businesses should make that clear,” he said. “Otherwise people think it’s just a bunch of businesses who don’t care about public health.”

Hiccups in New England

New England’s first two recreational marijuana markets, Maine and Massachusetts, are experiencing hiccups in their rollouts.

Maine’s adult-use legalization vote is undergoing a recount. And Massachusetts lawmakers are eyeing a delay in the program’s launch.

But that doesn’t mean there’s a regional pushback against cannabis legalization, according to one industry analyst.

Adam Fine, a Boston attorney with the cannabis law firm Vicente Sederburg, doubts the delays will have an impact on rec legalization efforts in states such as Rhode Island or Vermont.

Both are considered possible candidates for adult use.

“I think people should think positively about the state measures,” Fine said, adding that local residents are aware the Massachusetts law should provide plenty of business opportunities on top of the MMJ possibilities that already exist.

Fine still anticipates the Massachusetts legalization law will take effect Dec. 15 and people 21 or older will be able to possess and consume recreational cannabis.

The next step in the Massachusetts rollout from a business perspective is the appointment of a three-member cannabis commission.

Fine said the Massachusetts lawmakers he and his firm have spoken with have given no indication they’ll block the law’s implementation.

“I’ve been encouraged in lawmakers’ response that they will respect the will of the voters,” he said.

If there are delays, other states in the region could go to market before these two can go online.

Fine said Maine and Massachusetts will benefit from the taxes and the revenue that will flow from legalization, as well as the dent it will likely put in the black market.

If anything, he added, other states should watch and learn from Maine and Massachusetts’ experiences.

Bart Schaneman can be reached at barts@mjbizdaily.com

Omar Sacirbey can be reached at omars@mjbizdaily.com